If you’re a business owner, CPA or hiring executive, this is for you. Everyone knows that hiring veterans is both the right thing and the smart thing to do for many reasons.
Miltary veterans bring a unique set of skills to the civilian labor market. Few organizations like the military can teach, enforce and reward the characteristics of teamwork, initiative, leadership, organization and mission.
The military is also a highly diverse and talented group of people. As a result, veterans have deep experience working well with others. That experience instills respect and the ability to adapt and excel in a wide variety of circumstances.
In addition to their strong skillsets and personal characteristics, veterans can bring an added financial benefit to their employer via the Work Opportunity Tax Credit (aka WOTC). WOTC (pronounced watt-see) is a federal tax credit available to employers who hire individuals with significant barriers to employment.
Despite their excellent credentials, veterans experience high unemployment rates and are therefore considered a valuable WOTC target group. This is particularly true of disabled veterans who were injured while serving in the armed forces.
The tax credit amount equals a percentage of the wages earned by the veteran during his or her first 12 months of work. Depending on why they qualified, the maximum tax credit ranges between $2,400 and $9,600 for each qualifying veteran hired. This tax credit offsets their employer’s federal income tax, dollar for dollar!
Many businesses hire veterans but are not aware of the WOTC program. They are not requesting the required WOTC forms and are therefore missing out on significant tax savings. Once they understand the personal and financial benefits of hiring veterans who qualify for WOTC, a business is more likely to make it a real priority.
For example, what if a small company hires 10 veterans and 5 of them qualify for WOTC? That business has gained 10 excellent employees. If the 5 qualifying employees generate on average just $5,600 each, the business has also earned $28,000 in federal tax savings (5 x 5,600 = 28,000).
There really isn’t one. Businesses that hire our nation's veterans are offered the maximum WOTC tax credit available. It’s a win-win. Veterans find jobs while employers gain some of the very best employees available. And the WOTC program gives private business an extra financial incentive to help the men and women that have so faithfully and loyally served our country.